NBTY, Inc. to Pay $2 Million Penalty For Alleged Violations of FTC Order

Federal Trade Commission (FTC) | Oct 11, 2005

Company Distributes Dietary Supplements in the U.S. and Abroad

Under the terms of a consent decree approved by the Federal Trade Commission for submission by the U.S. Department of Justice (DOJ) to the federal court for approval, NBTY, Inc. (NBTY, formerly Nature’s Bounty, Inc.), a leading manufacturer and distributor of dietary supplements in the United States and abroad, will pay a $2 million civil penalty to settle charges that it violated the terms of a 1995 Commission order by making false and misleading health claims about two of its products. The FTC charged that the defendant made unsubstantiated promises that its products would cause consumers to lose weight or cure a variety of health problems.

“Misleading health claims prevent consumers from getting useful information and can delay treatment for serious medical conditions,” said Lydia B. Parnes, Director of the FTC’s Bureau of Consumer Protection. “Companies already under order for making deceptive health claims should know better than to try it again.”

Case Background

In 1995, NBTY and its two wholly owned subsidiaries, Puritan’s Pride, Inc., and Vitamin World, Inc., settled FTC charges that they made deceptive claims for 26 products. The FTC alleged that, among other things, the company claimed falsely or without substantiation that its products promoted weight loss, increased muscle mass, decreased body fat, promoted hair growth, prevented premature hair loss, lowered cholesterol, and prevented arthritis. Under the terms of the order settling the matter, NBTY agreed not to make unsubstantiated claims about any dietary supplement and not to misrepresent the results or conclusions of any test, study, research article, or any other scientific opinion or data. NBTY further agreed to pay $250,000 in consumer redress.

The Alleged Violations

If approved by the court, the consent decree will resolve allegations that NBTY violated the 1995 order through its subsidiaries. The FTC charges that from 2001 through 2003, Dynamic Essentials, Inc., an NBTY subsidiary, marketed a Tongan seaweed extract, “Royal Tongan Limu,” advertising in English and Spanish that it was clinically proven to cure, prevent, or treat a range of diseases and disorders such as allergies, diabetes, cancer, and Alzheimer’s disease.

The FTC alleges that during this same period, NBTY, through its subsidiaries, also claimed that “Body Success PM Diet Program” reduces body fat, increases metabolism, and causes weight loss, even during sleep. According to the FTC, the company lacked reliable scientific evidence to prove that its claims for either product were true, and misrepresented that tests, studies, research, articles, scientific opinion, and data supported its claims for Royal Tongan Limu.

The Consent Decree

Under the terms of the consent decree, NBTY and its subsidiaries are barred from violating the 1995 order, and NBTY must pay $2 million in civil penalties. The consent order also contains terms requiring NBTY to distribute the order to certain company personnel, as well as to keep relevant records and provide them to the Commission to ensure compliance with the order’s terms.

The Commission vote approving the consent decree and authorizing transmission to DOJ for filing was 4-0. DOJ submitted the proposed consent decree to the U.S. District Court for the Eastern District of New York on October 12, 2005.

Copies of the consent decree and complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.